RetireJapan

Ah - ok. So basically it's an insurance policy that pays out if you die?

5.2% over 18 years is pretty bad - that's nominal, not real returns.
You'd need to double-check if that is net of any fees.
It may require annual payment (not monthly etc) - not an issue if you're paying monthly.
May need to double-check on what conditions are needed for payout.

If you already have life insurance, you don't need this. Junior Nisa would be the better alternative - even assuming real returns of only 2% or so for 18 years puts you ahead of where you'd be the JA fund, and almost certainly would be better tax treatment.

As a general rule - use insurance products for insurance, investment products for investments. Mixing them is rarely a good idea.

DragonAsh,

Thank you kindly for the info.
Do you happen to recommend any other option rather than the Jr. NISA?

Bumping this thread -

Lurker and first time poster here.

I am an American based in Osaka, and with the guidance of this website I started investing in ETFs through Interactive Brokers 2 years ago.

Now I have a daughter on the way and I'm looking for ways to save up for her college education.

For Americans, it looks like my options are:

1. Start a J-NISA account. But no ETFs available as it runs into the whole PFIC tax complications for Americans. So I will be limited to just picking single stocks.

2. Start a gakushi hoken insurance plan from JA (or one of other other alphabet list of insurance companies). From looking at brochures it looks the return is basically only nominal interest gained. Not great, but at least once its set up with automatic withdrawals, I wont ever have to think of it. Does anyone know if the tiny interest gained from these plans would run into any PFIC / tax complications?

3. Hybrid J-NISA and Gakushi hoken plan: Start a J-NISA account with some single stocks and also start a Gakushi-hoken plan. Might be best, but if I'm limited to picking single stocks, I don't know how useful the J-NISA will be.


I guess those are about my only options. Any other Americans here with different ideas or plans?